We Think Some Shareholders May Hesitate To Increase Sensient Technologies Corporation's (NYSE:SXT) CEO Compensation

By
Simply Wall St
Published
April 16, 2021
NYSE:SXT

CEO Paul Manning has done a decent job of delivering relatively good performance at Sensient Technologies Corporation (NYSE:SXT) recently. As shareholders go into the upcoming AGM on 22 April 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Sensient Technologies

How Does Total Compensation For Paul Manning Compare With Other Companies In The Industry?

According to our data, Sensient Technologies Corporation has a market capitalization of US$3.4b, and paid its CEO total annual compensation worth US$7.3m over the year to December 2020. Notably, that's an increase of 26% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$945k.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$5.6m. Accordingly, our analysis reveals that Sensient Technologies Corporation pays Paul Manning north of the industry median. Moreover, Paul Manning also holds US$7.4m worth of Sensient Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$945k US$945k 13%
Other US$6.4m US$4.9m 87%
Total CompensationUS$7.3m US$5.8m100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. It's interesting to note that Sensient Technologies allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NYSE:SXT CEO Compensation April 16th 2021

A Look at Sensient Technologies Corporation's Growth Numbers

Sensient Technologies Corporation has seen its earnings per share (EPS) increase by 8.1% a year over the past three years. In the last year, its revenue changed by just 0.7%.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Sensient Technologies Corporation Been A Good Investment?

Sensient Technologies Corporation has generated a total shareholder return of 23% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Sensient Technologies that investors should look into moving forward.

Important note: Sensient Technologies is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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